Why You Need Workers’ Comp in South Dakota

You need Workers Comp Insurance in South Dakota if you have one or more full or part-time employees. South Dakota law protects workers by providing medical care and recovery of lost wages for injuries and illnesses that arise out of, or occur in the course of, their employment. The worker’s compensation laws are the exclusive remedy for covered employees; they surrender their right to sue in exchange for the employer’s provision of medical care and lost wages.

Buying Workers’ Compensation in South Dakota

Employers can get coverage for worker’s compensation in three ways. They can buy insurance on the voluntary market, they can apply to self-in=sure, or they can buy insurance through the assigned risk pool.

  • Private Insurance Market

    The voluntary market is the best way for South Dakota employers to buy worker’s comp coverage. They can enlist the services of insurance agencies to search the market and find the best value for price and benefits.
  • Self-Insurance

    The State must approve a detailed plan that covers financial stability and audited financial statements to prove capacity to cover potential liability. The self-insured approvals run from August through September of the following year and must be renewed annually. To apply, you must fill out the complete application with the Department of insurance and present supporting data including audited financial statements and recent financial statements.
  • Assigned Risk Pool

    The NCCI runs the South Dakota assigned risk pool and matches each applicant with an insurer; NCCI provides reinsurance. Applicants must present two or more declined coverage notices from private insurers.

Instructions for Buying

The first step is to make sure that you must have coverage. Employers must cover all employees unless the employer or the workers are exempt. The allowed exemptions include the below-listed categories.

  • Domestic workers with less than 20 hours per week and for less than six of any 13-week period.
  • Farm or agricultural workers
  • An elected official
  • South Dakota workfare participants
  • Workers not in the usual trade or profession of the employer
  • Independent contractors, real estate agents, truck owner-operators with Department of labor certification.

You should contact a licensed agent, independent agent, or broker to begin the process of assessing your needs, qualifications, and budget. You will probably get quotes from a number of insurance providers. If you prefer, you can go directly to insurance companies; the advantage of using an agent is to gain the knowledge and experience they possess.

Request an assigned risk pool quote from the NCCI if you cannot self-insure or find coverage on the voluntary market. Yhe NCCI operates the assigned risk pool for the state, as well as assigning classification codes and prices.

What You Should Know About Worker’s Comp in South Dakota

The NCCI is the official rating agency for the state. They accumulate data, define occupations. And set rates for coverage by worker classification. The insurance provider then adds to the base fee by assessing the employers MOD or history of claims.

While a librarian is likely to have a far lower rate than a Lumberjack, the employer’s that have records of low

  • 1

    The first step is to make sure that you must have coverage. Employers must cover all employees unless the employer or the workers are exempt. The allowed exemptions include the below-listed categories.

    • Domestic workers with less than 20 hours per week and for less than six of any 13-week period.
    • Farm or agricultural workers
    • An elected official
    • South Dakota workfare participants
    • Workers not in the usual trade or profession of the employer
    • Independent contractors, real estate agents, truck owner-operators with Department of labor certification.
  • 2

    You should contact a licensed agent, independent agent, or broker to begin the process of assessing your needs, qualifications, and budget. You will probably get quotes from a number of insurance providers. If you prefer, you can go directly to insurance companies; the advantage of using an agent is to gain the knowledge and experience they possess.

  • 3

    Request an assigned risk pool quote from the NCCI if you cannot self-insure or find coverage on the voluntary market. Yhe NCCI operates the assigned risk pool for the state, as well as assigning classification codes and prices.

incidences of injuries and claims get better pricing. Safe workplaces matter a great deal in worker’s compensation insurance. Workers comp is not permission to have an unsafe or poorly managed worksite; instead, it is meant to encourage employees and employers to greater efforts at workplace safety.

Is your business required to carry?

Every employer must have coverage unless it or the employee are exempt. The rule applies to employer with one or more full-time or part-time employees.

Where to Buy Insurance?

Buying worker’s comp insurance depends on the employer’s financial resources, type of business, and history of claims and losses. The private market is the ideal place to purchase, and self-insurance may be the most economical choice for some employers. Companies that cannot get coverage in the private market can show two or more declined applications and get coverage through the South Dakota Assigned Risk Pool.

How Much Does Workers’ Comp Insurance Cost?

Across all occupational classifications and employers, the average in 2014 was $ 1.35 per $100 in payroll. This figure put South Dakota in the lowest quarter of all fifty states. The actual cost for each employer depends on the occupations involved and the employer’s MOD or history of claims.

What Is the Cost of Not Getting Workers’ Comp Insurance?

Employers that fail to get and keep the required coverage lose immunity from civil actions. The law permits employee suits to recover lost worker’s comp benefits in addition to civil remedies. The state can impose penalties and fines for noncompliance with its orders.

Factors That Impact Coverage

Legal

Safety programs reduce the risk of injury and employers that run them effectively can reduce liability and qualify for safety t related discounts on insurance premiums. Workers must meet the requirements of the state in which they perform services. Some states have agreements with South Dakota to continue South Dakota coverage.

Contractors are not employees but must confirm their Independent-contractor status. Contractors must file an affidavit and fee with the State of South Dakota government, the division of Worker’s Compensation.

Liability

General contractors are liable for the coverage of an uninsured subcontractor. The prime contractor may have a right of action for any costs against the subcontractor as immediate employer. Prime contractors must confirm coverage by subcontractors to avoid responsibility.

Sole proprietors are excluded automatically from worker’s comp coverage but can voluntarily opt-in for protection. Officers and shareholders of certain corporations are included in worker’s comp as employees but may elect to opt out of statutory coverage.

Rates

The rates charged to an employer depend on the occupations it uses and the record of claims in the history if the business. The basic rate per occupation is the starting point for setting premiums for each employee.

Other Helpful Tips

The scope of South Dakota worker’s compensation law extends to injuries, illnesses, and deaths of covered employees whether occurring in South Dakota or elsewhere.

Conclusion

South Dakota employers need to get and keep Workers Comp Insurance to protect their employees, employee families, business assets, and personal assets. The worker’s compensation system proceeds on the basis of a no-fault determination and the facts needed are proof of employee status and work-related injury. The employee surrenders his or her right to sue for civil damages. Upon a claim of injury or illness, the employee gets a guaranteed set of benefits covering medical expenses and part of the lost wages.

Sources:

  • South Dakota Department of Labor Regulation, Division of Insurance
  • Independent Contractor Affidavit form
  • NCCI State Instructions